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The document discusses Enterprise Resource Planning (ERP) systems. It defines ERP as an integrated software system that manages a company's resources, including the integration of financials, customer, supplier and operational data. The key benefits of ERP are increased productivity, reduced costs and improved communication across the enterprise. However, ERP implementation requires significant costs and changes to business processes. Success requires top management support and commitment to business process reengineering.
The document discusses Enterprise Resource Planning (ERP) systems. It defines ERP as an integrated software system that manages a company's resources, including the integration of financials, customer, supplier and operational data. The key benefits of ERP are increased productivity, reduced costs and improved communication across the enterprise. However, ERP implementation requires significant costs and changes to business processes. Success requires top management support and commitment to business process reengineering.
The document discusses Enterprise Resource Planning (ERP) systems. It defines ERP as an integrated software system that manages a company's resources, including the integration of financials, customer, supplier and operational data. The key benefits of ERP are increased productivity, reduced costs and improved communication across the enterprise. However, ERP implementation requires significant costs and changes to business processes. Success requires top management support and commitment to business process reengineering.
An ERP system is an attempt to integrate all functions across a company to a single computer system that can serve all those functions specific needs. Integration is the key word for ERP implementation. It may also integrate key customers and suppliers as part of the enterprises operation. It provides integrated database and custom- designed report systems. It adopts a set of best practices for carrying out all business processes. Integrate financial information Integrate customer order information Standardize and speed up operations processes Reduce inventory Standardize Human Resources information Internal Benefits Integration of a single source of data Common data definition A real-time system Increased productivity Reduced operating costs Improved internal communication Foundation for future improvement External Benefits Improved customer service and order fulfillment Improved communication with suppliers and customers Enhanced competitive position Increased sales and profits Limitations of ERP technical capabilities Inconsistency with existing business processes Costs - implementation (hardware, software, training, consulting) and maintenance Impact on organizational structure (front office vs. back office, product lines, etc.) Changes in employee responsibilities Flexibility of software system upgrades Implementation timelines Availability of internal technical knowledge and resources Education and training Implementation strategy and execution Resistance to change Availability of web-based and wireless ERP systems Adoption of easy-to-install ERP systems Linkage to other software systems, e.g., supply chain management system, e-commerce, customer relationship management system ERP is a process of managing all resources and their use in the entire enterprise in a coordinated manner
ERP is a cross functional enterprise systems
that serves as a framework to integrate and automate many of the business processes that must be accomplished within the manufacturing, logistics, distribution, accounting, finance and HR functions of a business. Is management ready to undertake drastic business process reengineering efforts to yield dramatic outcomes?
Is management ready to make any changes in
the structure, operations, and cultural environment to accommodate the options configured in the ERP system?
Is the organization financially and
economically prepared to invest heavily in an ERP implementation? People-related issues such as corporate philosophy and leadership style can play an important role in the ERP implementation process.
Research has concluded that active top
management support and commitment are essential to the success of any system implementation. Employees can be quite wary of any kind of change in the business processes, particularly during periods of economic downturn.
Ill-trained employees who fight the changes in
the business process tend to be poor performers. Depending on the size of the company and the modules installed, the cost of implementation can range from one million to five hundred million dollars, and will take as long as two years for a mid-size company and seven years for a large, multinational corporation to complete. First, managers must conduct a feasibility study of the current situation to assess the organizations needs by analyzing the availability of hardware, software, databases, and in-house computer expertise, and make the decision to implement ERP where integration is essential.